45% Of Small Businesses Cite Slumping Sales, Not Lack Of Credit, As Top Concern; 25% Fear They Won't Survive

Washington, D.C. (AHN) - For the one-in-four small businesses that are worried about surviving the recession, credit isn't a factor, slumping sales is the problem, according to a recent survey by the National Federation of Independent Business Research Foundation.

Non-profit small business association NFIB also found that 16 percent of small businesses surveyed said that the recession has depressed their business prospects for the foreseeable future.

Although the Bush administration has focused on unfreezing credit by bailing out troubled financial institutions as the way to ease the economic crisis, the survey found that more credit isn't helpful for small to middle size businesses.

The report's author, William Dennis, said the fundamental problem for small business is the poor economy, made worse by the drop in real estate values and financial turmoil in the U.S.

"Efforts to provide additional credit, whether through encouraging bank lending or government loan guarantees, are not likely to be of much help to small business owners," Dennis said. "Those businesses who report they can't get credit are typically unable to absorb more debt."

Dennis said that a better solution to the economic crisis than giving billions of taxpayer dollars to banks and other financial institutions would be to suspend payroll taxes for six months to give small businesses and their employees more money to spend.

NFIB asked 750 employers with fewer than 250 employees what their top economic concerns were:

• 45 percent slowing or lost sales
• 23 percent market unpredictability
• 9 percent sinking real estate values
• 9 percent cost and/or terms of credit
• 8.9 percent credit access ability